Buying or Selling a Home With Solar Panels in Orange County, NY: Owned vs. Leased

By Ammar Iqbal | Real Estate Salesperson, eXp Realty

Solar panels are common on roofs across Orange County. If you are buying or selling a home that has them, the big question is simple: are the panels owned or leased? The answer changes the whole deal.

Owned panels

If the seller paid cash for the system or financed it with a loan that will be paid off at closing, the panels are usually treated like any other part of the house. They transfer to the buyer with the home. Buyers should still ask for the install date, the warranty paperwork and recent electric bills to see what the system really saves.

Leased panels or a power purchase agreement (PPA)

With a lease or PPA, a solar company owns the equipment. The homeowner pays a monthly fee or pays for the power the panels produce. When the house is sold, one of three things usually happens:

• The buyer takes over the lease. The solar company typically has to approve the buyer, often with a credit check. This can take a few weeks, so start early.
• The seller buys out the lease and the panels then transfer as owned equipment.
• The panels are removed, which may be costly and is not allowed under every contract.

Watch for filings on the title

Solar companies often record a notice (sometimes called a UCC filing) to show they own the equipment. It can come up during the title search and delay closing if nobody planned for it. This is one more reason title insurance and an early title search matter.

Tips for buyers

• Ask for the full solar contract before or right after your offer is accepted.
• Check the monthly payment, any yearly increases and how many years are left.
• Tell your lender. A lease payment may count in your debt-to-income ratio.
• Have your home inspection look at the roof around the panels.

Tips for sellers

• Gather the contract, transfer forms and solar company contact info before you list.
• Disclose the solar setup clearly (see seller disclosure in Orange County).
• Know your buyout price in case it helps a buyer say yes.

Do solar panels add value?

Owned systems with low electric bills can be a plus. Leased systems are more neutral, since the buyer is taking on a payment. Either way, clear paperwork keeps the deal moving.

Browse Middletown and Orange County homes for sale, learn more on my Middletown, NY area guide, or get a free home value estimate. Questions about a solar home? Reach out any time.